A decision support methodology for risk management within a port terminal

Abstract

The objective of this paper is to analyze and assess operational risk within the port terminals at the RO–RO activity. The paper proposes a specific methodology based on AHP multicriteria approach. After detection of the inherent risk of process and estimation of the both gravity and level of mastery we judge against two approaches in order to identify the most critical risks and to establish preventive measures.

Introduction

Today in the era of globalization and competition, industrial companies focus more and more on their heart activity and outsource other tasks out of their areas of expertise. Hence flows of goods have increasingly growing and development of international intermodal transport networks. With the arrival of container, handling is standardized and transit time from one mode of transport to another has significantly decreased. However, the passage through the port terminal still the weakest link in the intermodal transport chain, for this reason the need to optimize port management in order to accelerate and reduce the cost of moving the goods through the port. Optimization of operations within the port container terminal is very important, because the charging time has a great impact on the economic viability, hence the importance for the efficiency and effectiveness of the identification and the mastery of inherent risks (Mabrouki et al., 2013a, Mabrouki et al., 2013b).

Risk management is “the adoption of financial, technological and organizational changes to the relationship between environmental turbulence and variability in the results …” (Aubert and Bernard, 2004, p. 8). It may be defined as “a coordinated set of activities that are performed by an organization to identify, measure, evaluate and modify both the probability of occurrence of certain events that may have an impact on one or more entities, and the impact of these events on the entity” (Aubert and Bernard, 2004).

The port management is exposed to several types of risks e.g. damage when unloading a vehicle, theft of cargo, etc.

Risk management is based primarily on the analysis and assessment of all relevant and available information (Hallikas et al., 2004). This process is usually structured around five phases (Dorofee et al., 1996):

• Identification of risks. Is a step to identify the risk factors, the triggering events, their causes and their potential consequences.

• Risk analysis, is to determine the nature and level of risk. In addition, risk analysis provides a picture of the causes and consequences and aims to describe the risk either qualitatively (in terms of type of risk) or quantitatively (in terms of criticality) (Aven, 2008).

• Planning and scheduling preventive and corrective actions.

• Monitoring and implementation of action plans.

• Effectiveness monitoring of measures taken via mechanisms of prevention and protection.

It is important to note that communication is essential throughout the process of risk management (Fig. 1).

In the industrial environment, port activity is one of the more complex components of the supply chain where risk management is present on financial, technological, organizational and operational aspects. With over 80% of world trade carried out by sea, port terminals are vital to the development of international trade (Siim Kallas, Vice President of the European Commission 2012). The safety of maritime transport has thus become an essential condition for the proper functioning of economies. Faced with this situation, a number of international standards have emerged, including: ISPS, C-TPAT, CSI (Barnes and Oloruntoba, 2005, OECD, 2003). Standard ISPS (International Ship and Port Security) corresponds to the security of ships and facilities. All ships and terminals were subjected to ISPS security officers and the ship or the port facility assessments and security plans. C-TPAT, probably an extension of the partial CSI, works a little differently because it covers not only the maritime sector; but it actually covers the entire chain (Fig. 2).

The operational level of port terminals is characterized by huge infrastructure and critical resources as limited and rapidly changing traffic. Such an environment so complex, has led many points of failure at several levels, such as administrative activities, operations management, incident management, facilities management, and infrastructure management. Such problems require a particular methodology to identify and assess operational risks in order to establish preventive measures in port terminals.

At the studied port, vehicle traffic activity roll-on/roll-off (RO–RO) represents more than 70% of the port traffic (Port of Casablanca, Morocco 2012). It is quite natural to master the port offer to the evolution which becomes more and more interesting and more complex to manage. However, a good traffic management, improved service quality and especially the satisfaction and loyalty of customers are the keys to success and have good governance. This is why the activity RORO (roll-on/roll-off cargo) is engaged in a dynamic sustainable implementation of risk management devices to guarantee better control of operational risk. Moreover, the analysis of the historical evolution of risks has led to the identification of a gap between the reality of operational risk at the field level and risk management policies currently adopted. Hence the need for reassessment of risk in operational activity RO–RO in terms of nature of gravity and level of mastery.

This paper is organized as follows: a literature review of the proposed approaches to risk management is set out in Section 2. The issue of port terminals in the port of Casablanca is presented in Section 3. A specific method adapted to the problem based on a multi-criteria approach is described in Section 4. Finally and before concluding the results are presented and analyzed in Section 5.